However, given that it differs from many other marketing channels in terms of being a long-term and muti-faceted venture rather than something you can turn on and off at certain periods (such as paid search), it can be difficult to know how much marketing budget to allocate on it.
Here, we’ll look at how to budget for SEO and how it weighs up alongside other marketing channels in terms of spend.
How much should I be spending on SEO?
There’s no right answer here as of course, budget availability will depend on business size and what stage they are in their digital maturity. Budgets can range from $1,000 a month to $20,000 a month and beyond.
No two businesses are the same, with even a global car hire business (for example) likely requiring a different budgetary approach to its nearest rival of a similar size. Even if both these companies are competing for a similar level of market share, one could be much further along in its SEO journey than the other. This often ends up with the requirement of a personalised, nuanced approach in budget spend for SEO.
However, there are some general rules of thumb that can be applied when it comes to earmarking budget for SEO. A good place to start could be assessing your existing revenue opportunities from your marketing channels as a whole.
Looking at your website’s analytics, how much of your traffic is currently being generated from the organic search channel? What does your brand versus non-brand traffic split look like? What is the opportunity for growth here based on data you might have from competitor analysis, share of voice and keyword research? What data do you have on average customer spend and average customer lifespan across your business?
Organic traffic share is often over 50% for many websites so the opportunity to benefit from this better commercially via SEO investment is huge. Studies also indicate that it trumps paid search on conversion rates across a number of industries, and can be a long term lead generator if done correctly. This might suggest that a larger chunk of your overall digital budget should be allocated to SEO over other channels such as paid search and paid social.
Assuming you have a clear goal in terms of outdoing certain competitors and are intent on committing to a certain budgetary number and resource allocation over a sustained period of time, then perhaps a figure of around 30-40% of your total digital budget could be allocated to SEO.
What do my SEO investments need to cover?
We’ll cover the different types of SEO investment models shortly, though let’s first look at what the typical areas of SEO you’ll need to consider. SEO is quite a large umbrella in terms of the individual activities it covers, with the typical larger “buckets” of SEO areas featuring lots of individual activities within them that require consideration and budgetary allocation.
Depending on the type of business and what areas are required for growth, the need for investment across these various areas will vary. However, there are some core areas that you’ll need to invest in for both the now and the future if you’re seriously looking to budget for SEO.
- SEO Tooling and Software
There are plenty of impressive SEO tools on the market that can be tailored to almost any business need. Whether you’re a large enterprise brand looking for a tool that offers multiple user seats and mass data storage or are an SME with a small website that requires a straightforward performance dashboard, there are plenty of tools on the market to help with this.
While there are some that will say that tools aren’t required for SEO, the truth is that tooling, whether it’s to help your business automate areas of technical SEO auditing, perform keyword/topic research or help formulate reports, is a sensible investment. There are tools that can offer a “one size fits all” solution (such as SEMRush or Ahrefs) or specialist tools that cover areas such as technical SEO and content SEO in more depth. Whatever your business needs, you’ll need to consider a certain amount of spend to cover SEO tooling.
- Technical SEO
Technical SEO covers areas such as site speed, site architecture, structured data implementation, indexation and crawling management as well as internal linking and other areas of HTML optimisation. Depending on the size of your website and business, you’ll need some involvement in some of these activities at some point during your SEO growth journey.
A typical SEO project may start with a technical SEO audit on a website to help discover opportunities for better user performance and indexation on Google. Following this, there will then be a need for technical SEO expertise to keep an eye on any potential performance issues and additional opportunities in this field as the site grows.
- Content SEO
As alluded to above, these larger “buckets” of SEO investment areas do cover a lot of individual ventures. Content SEO features activities such as link building, digital PR, keyword research, content strategy and content writing as well as other areas such as local SEO and Google Business Profile Management.
It’s highly likely that your business will need some effort across some of these activities in order to ascertain growth. Even with the most perfect set-up technically and with a seamless user experience, you’ll need good content to draw in users and broaden your audience via search engines. For content SEO, you can consider investing in a team or individual that specialises in this (depending on your business size) so there is the right level of focus given to this area.
While it’s true that many SEO consultants are competent in both technical and content SEO, it may be prudent to allocate budget to these disciplines separately if you’re able to in order to allow for proper focus across both areas.
What different types of investment models are there in SEO?
There are a number of ways in which you can invest in SEO. In terms of project types on a contractual basis, you can bring in SEO professional support on a short-term project basis to tackle any needs you may have at a certain time (such as a growth strategy or technical SEO audit). This can often be facilitated via the use of agencies or consultants. There is also the retainer model, whereby you have ongoing support across SEO, again either by agencies, consultants and in this case in-house staff.
While there will always be a need to be flexible and needs will differ at different stages in the types of support needed, SEO isn’t a one-off investment, and it is recommended to maintain an ongoing budgetary allocation for SEO in some form.
Hiring in-house SEO resource
A good way to ensure you’ve got a long-term pair of eyes on the SEO considerations for your business, whether this is an individual or a team, is to consider hiring staff in-house. While this will mean you’ll have an ongoing spend on staff costs, it may give you peace of mind if you find the right hire that is invested in your business and is looking after your best interests by steadily driving growth.
Outsourcing SEO
Outsourcing SEO can come in the form of hiring an agency to look after all your needs or bring in a consultant. Agencies will allow you access to their talent pool in terms of SEO knowledge and resource (budget depending), while some experienced consultants will be very nimble in terms of understanding how to move the needle for a business. While the sky’s the limit budget-wise, outsourcing SEO offers greater flexibility and has the potential to be cheaper.
We’ve covered the pros, cons and considerations of investing in an agency, in-house resource or a consultant in our detailed buyer’s guide to SEO.
SEO vs PPC: how to balance the budget
Let’s now take a more focused look at how SEO budget may be compared to perhaps its closest relative in the acquisition channel family (at least proximity wise), that being paid search (PPC).
While both search engine visibility related, there are some crucial differences in how to approach both from a monetary perspective. Again, situations will differ business by business and will of course vary depending on which stage of growth they’re at.
As a general rule of thumb, paid search can be fruitful in achieving short term goals, with a “turn it on and off approach” that you can generally forecast relatively accurately in terms of potential ROI if it’s conducted well.
If you’re a small business and are starting out in your search engine visibility journey, then PPC can deliver immediate results if you’re bidding on the right keywords. If budgets are tight at any stage, you can also pause PPC activities, allowing more flexibility on when you feel it is right to capture demand. The opposite can be true if you need to up the ante in terms of spend during key periods such as Christmas or Black Friday.
SEO, being a more long-term growth strategy, involves taking a sustainable view on investment by committing to spend on resourcing (be it an agency, in-house hire or a consultant), tooling and committing. This can involve a number of activities such as technical SEO auditing, content strategy and creation, link building and local SEO, to name a few.
As time goes on and your brand visibility grows, there may come a time where your organic search rankings, as a result of your sustained SEO efforts, negate the need to invest continually on paid search ads for certain keywords.
If you’re early on in your digital journey and your site footprint is small, then it may be worth investing more in paid search over SEO, perhaps a 60/40 split. Then may then flip over your brand and content offering grows, with SEO investment driving leads naturally with a high rate of ROI over paid search.
It’s certainly recommended to invest in both during your business’ lifecycle, and you will need to assess your needs and revenue potential from each channel depending on the situation at hand. What’s clear though is that sustained SEO investment is the clearer route to better ROI on a long-term basis, so you should be doing all you can to get your business into a position where leads are generated from your organic keyword rankings without the need for continual ad spend.
How do I measure the performance of my SEO investments?
Whatever the nature of your investment in SEO, you will need to be clear from the offset in what “good” looks like in terms of ROI. This will need to be discussed and agreed with your relevant staff member, agency or external consultant, depending on which route you choose to invest in.
Metrics such as organic traffic, keyword rankings and visibility scores are good places to start, though ultimately, you’re going to want to see those numbers translate into commercial figures. This is where your analytics tooling and reporting dashboard setups will need to come into the fold. Here are a number of metrics to consider:
- How many conversions in the form of sign-ups, purchases, form submissions or other end of funnel event completions have been driven by SEO?
- How much is SEO contributing to online revenue compared to other channels over time?
- Is SEO improving CLV (customer lifetime value)?
- What is the CPA (cost per acquisition) of SEO? To calculate this, look at the total cost of your SEO investments across head count, resource and tooling, and divide this by the total number of conversions achieved by SEO over any given time
- How has our Share of Voice (Search) been impacted during our SEO investment?
What are some misconceptions about SEO investment?
As with any digital marketing arena, there are some misconceptions on costs and what you can expect to see from your investment. Let’s break down some common ones:
- Expect immediate results
Any potential SEO suitor, be it an agency, consultant or in-house hire that promises you immediate results after their investment should be avoided. There are still some nefarious actors out there who may implement tactics that deliver short term gains, though this is likely to harm your brand in the long term. Find out exactly where your money is going in terms of SEO activities undertaken.
- SEO takes 6 months of investment to see results
While it may sound deliberately contrarian to the above point, this is often a common phrase thrown around in the industry. While SEO is indeed a long-term investment that can take a while to pay dividends, there are always levers to pull which can help with small quick wins in the short-term. This is very different to some of the nefarious tactics used to deliver quick results (such as black-hat link building) and may centre around areas such as tweaking content pieces or targeting niche keywords. Again, ask your potential suitor where there are some short-term wins that can complement the overarching long-term vision.
- SEO is expensive
While it may be true that investment will need to be sustained over a long-term period, the potential savings in terms of ROI compared to other channels make it one of the most cost-efficient channels out there. After a period, it ends up paying for itself if you have achieved high search rankings on commercial terms due to SEO efforts. Furthermore, given SEO covers a lot of activities, you as a business owner, have the power to choose which type of package to go for in terms of what you think will drive growth. This may be solely on content, link building, or improving site speed performance depending on your situation.
- SEO investment stops once you’re in position 1
Of course, one of the primary goals of SEO is to achieve top search rankings on the keywords that matter commercially to your brand. This doesn’t stop once you’ve achieved this, however. Amidst algorithm updates, competitor activities, changes in your industry and the changing nature of SEO in general, you will need to continue to stay on top of things. This may involve ensuring that you’re maintaining your top ranked keywords but are also keeping a constant eye on new content opportunities to improve your visibility on.
Wrapping it all up
SEO, unlike other channels, does come with a lot of potential headaches in terms of budgeting. This is not only due to the nature of it as a channel, but also given there are so many areas of SEO to consider.
Considered properly however and with a solid strategy behind it, good SEO budgeting can be a real growth driver for your business. SEO is often called the “free” acquisition channel, and while this isn’t true as you’ll still need to spend in order to get it moving, good SEO can end up looking after itself after a while in terms of ROI potential.